105

28th April, 1927

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

BRITISH TRADE

In my last letter I sent you some information about British trade and made the remark that unemployment figures had shewn a considerable improvement. Unfortunately this week's figures have been of an alarming nature, indicating a 28,000 increase in unemployment and shewing that there are 109,000 more unemployed persons in Great Britain during the last week than there were in the same week in 1926. It is possible that the increase in unemployment is partly due to the aftermath of the Easter holidays but I do not think that that can account for anything like 28,000 people.

THE AUSTRALIAN TARIFF AND BRITISH TRADE

I am enclosing a leading article from today's 'Times' to which I would particularly like to draw your attention. [1] The Annual meeting of the Association of British Chambers of Commerce is taking place today and I learnt that several branches were submitting resolutions drawing attention to the heavy incidence of Dominion tariffs on various branches of British trade. I, therefore, saw a friend at the 'Times' and provided information upon which this leading article was based.

I feel sure that you will agree that the publication of this information in the 'Times' just before a public discussion of the resolutions is likely to draw a good deal of the sting out of the discussion and is, therefore, from our point of view very valuable propaganda.

'LONDON WEEKLY'

I am enclosing a copy of the 'London Weekly' for April 23rd and would particularly draw your attention to one section of the financial survey which was written by the Rt. Hon. W. Graham [2], M.P. Apparently Graham has suddenly come across your speech at the Economic Session of the Imperial Conference.

It is rather interesting to find that a man in Graham's position should write in this way on your speech so long after its occurrence.

In this issue I contributed an article on Australian trade and I would also draw your attention to an amusing paragraph among the notes for which I must also plead guilty.

'CANADA'

I am enclosing a leading article from 'Canada', a weekly paper published in London, which is apparently intended to indicate to Canada that she should follow Australia's example and cooperate more effectively with British agencies, such as the Empire Marketing Board. I presume the Editor came across a copy of my pamphlet and I was very surprised to see the personal reference.

AUSTRALIAN WINES

I am enclosing a copy of the Budget Debate in which the Wine Duties were passed. In connection with this subject I had a call yesterday from a Mr. Walker [3], of Adelaide, who claims to be the largest individual exporter of Australian sweet wines. He said that last year his own firm exported 500,000 gallons. He showed me a cable which he had received from his Agents in Australia, who stated that there was great uncertainty as to whether the Government were going to further reduce the export bounty and also as to whether the Government were going to introduce restrictions on export. He told me that today there is a great opportunity for selling Australian sweet wine at a satisfactory price for forward delivery but that the Tarragona people are anxiously trying to convince the British Wine Merchants that they will continue to cater for the trade. Their proposals are to export one-third of dry wine under 25, one-third of very sweet wine under 25 and one-third of very heavily fortified wine of about 41 and to arrange for these three consignments to be blended and pasteurized in this country.

The British Wine Merchant is a little doubtful as to whether the resultant liquor would be satisfactory and is, therefore, prepared at the present moment to make large contracts with Australia. The apparent uncertainty of the position in regard to the Commonwealth Government's intentions is, according to Mr. Walker, making it impossible to quote firm prices and may, in his opinion, result in Australia losing a great opportunity. In my own opinion Mr. Walker seemed to exaggerate the position but I feel that it would be very advantageous if the Commonwealth Government could see its way to declare that the revised bounty will remain in force at the figures already announced at least for two years.

COMMONWEALTH COUNCIL FOR SCIENTIFIC & INDUSTRIAL RESEARCH

I am glad to be able to inform you that I have received very pleasant personal and official letters from Mr. Julius [4] and Dr.

Rivett. [5] I have also seen something of Professor Watt. [6] The letters from Australia indicated that the Executive Council [7] were finding the information that I am sending to them on research work in this country and on the work of the Research Grants Committee of the Empire Marketing Board both interesting and valuable.

Professor Watt has left for Rome but on his return is going to spend a day or two going through the information that we have collected here with special reference to agricultural problems. He seems to consider that the idea of the Commonwealth Council for Scientific & Industrial Research being represented in London by the official representative of Australia on the Empire Marketing Board is an eminently suitable method.

I am collecting information from the best available sources for the Council on the subject of the Tropical Agricultural Research Station. I think that it would be quite feasible to give special emphasis to Tropical Animal Husbandry in such a way as closely to link the Agricultural Research Station with the whole question of Tropical Hygiene and the work of the Tropical School of Medicine, Cairns. In fact I believe that some such arrangement might be very suitable for Australia's part in the Empire's link, quite apart from the outstanding importance of this type of work from the problems of Tropical Australia.

D. & M. COMMISSION

Up to the present time I have merely received two or three brief notes from Gepp [8] explaining that he is extraordinarily busy and that he will make arrangements for proper liaison between the D. &

M. Commission and this office as soon as he can. I quite understand the position but at the same time would just like to remind you that from one source or another-whether it be the Ministry of Markets or the D. & M. Commission-it is most essential that I should receive continuous information as to happenings of economic importance in Australia. Without this information the utility of my work must be at least to some extent handicapped.

PREFERENCE BALANCE SHEET

I have recently got out some figures shewing what Great Britain gives and what Great Britain receives in the way of preference from the various countries of the Empire. This statement will be of considerable interest to you and I enclose a copy herewith. You will notice that so far as both India and the Crown Colonies are concerned, Great Britain already gives more in preference than she receives. Of course with each of the Dominions the position is reversed. In the case of South Africa, it is probable that the figures for 1926, when available, will shew a very substantial reduction in the value of the preferential rebate allowed by that Dominion to Great Britain.

MR. A. F. BELL [9], C.M.G.

I have had a number of long talks with Bell about dried fruits, trade publicity work and Geneva. I took him to see Ormsby-Gore [10] and he lunched with me to meet Tallents [11], the Secretary of the Empire Marketing Board.

I think you know that I have only casually met Mr. Bell once before his arrival in this country and I am delighted to find that we seem to see problems in just the same angle; it is also pleasant to meet a man who has so high a regard for you and such admiration for the work which you are doing for Australia.

Mr. Bell was anxious to have my advice on questions connected with the International Economic Conference. I suggested to him that an attitude of watchful reticence was much the best line to take at Geneva itself but that the Australian Delegates should take an early opportunity of making clear to the British Delegation that they were not prepared to agree to any proposals which might in any way limit the economic freedom of the British Dominions; to make what economic arrangements they thought most suitable for their own development.

The British Delegation is almost wholly consisted of free traders and Sir Arthur Balfour [12] and Mr. W. T. Layton [13] have deeply committed themselves to the policy of the reduction of tariff barriers. They are both confirmed and intense believers in the importance of the European market to Great Britain and I feel certain that our people ought to make them vividly aware of the Australian point of view.

PARLIAMENTARY QUESTIONS AND ANSWERS

I am enclosing one or two Parliamentary questions and answers which will be of interest to you.

ANZAC

On the 26th April the 'Times' in their third leading article published a very well written appreciation of Anzac and I am enclosing this article which I am sure you would like to read.

Yours sincerely, F. L. MCDOUGALL

1 'Dominion Markets and Tariffs' showed that despite tariff increases, consumption of British goods in the Empire had increased and that Empire markets were more valuable than foreign.

2 Labour M.P.; Financial Secretary to the Treasury 1924.

3 R. C. Walker, of Messrs R. C. H. Walker Ltd.

4 George Julius, Chairman of the Commonwealth Council for Scientific and Industrial Research.

5 David Rivett, Deputy Chairman and Chief Executive Officer of the Commonwealth Council for Scientific and Industrial Research.

6 R. D. Watt, Professor of Agriculture, Sydney University;

Chairman of the N.S.W. State Committee of the Council for Scientific and Industrial Research.

7 The Scientific and Industrial Research Act 1926 provided for a Full Council comprising three members appointed by the Commonwealth Government, the Chairman of each State Committee and co-opted experts. Between Full Council meetings, the three appointed members acted as an Executive Committee, presumably the body to which McDougall refers.

8 H. W. Gepp, Chairman of the Commonwealth Development and Migration Commission.

9 Member of the Commonwealth Dried Fruits Control Board;

Australian delegate to the International Economic Conference.

10 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies; Vice-Chairman of the Empire Marketing Board.

11 S. G. Tallents.

12 Industrialist; member of many government advisory committees;

Chairman of the Committee on Industry and Trade.

13 Editor of the Economist.